IG Group expects full-year profit growth
Spread-betting company IG Group expects to report increases its full-year revenues and profits this year, it said in its fourth-quarter trading update.
Steady revenue growth over the past year has boosted its profit expectations despite low and falling volatility. High volatility is usually the bedrock of its performance.
Revenues rose two per cent in the past three months to £86m, or six per cent growth when the Japanese market, which is undergoing strict regulatory change, is stripped out.
IG warned it had been “extremely challenging” to deliver year-on-year growth in the past quarter thanks to outperformance in that period in the 2010 year.
It is now forecasting a seven per cent rise in revenue to £320m and adjusted pre-tax profit of £163m for the year to May 31, up from £157.6m in 2010.
It has written off about £7.75m from the wind down of its Extrabet sports betting division, which failed to find a buyer after underperforming.
Evolution Securities analyst James Hollins, said more expansion was expected.
“We think IG has the product quality, brand value and customer acquisition/retention skills to maintain its considerable market leadership and utilise IT and marketing investment to gain further market share without reducing spreads,” he said.
IG will report its full-year results on July 19.